Air Seoul launches to support its parent, Asiana. Korea's seventh LCC, Nambu Air, plans start-up

Asiana Airlines has joined All Nippon Airways in having two LCCs: Asiana's Air Seoul launched in the Korean domestic market on 11-Jul-2016 and will expand to international markets in Oct-2016. Air Seoul gives Asiana access to the Seoul market via an LCC under 100% ownership, whereas its first LCC, Air Busan, is mostly focused on the Busan market and Asiana is only one investor. Asiana is transferring slots to Air Seoul at Jeju airport, which is capacity constrained.

Asiana must make up for the lost time when it was largely absent from the Seoul LCC market, which is becoming dominated by Jeju Air, Jin Air and foreign LCCs. Yet Air Seoul's agenda is not ambitious - starting by taking over monopoly Asiana routes to secondary Japanese cities. Such a cautious "hand-me-down" route strategy may improve finances but prevent Air Seoul from establishing a necessary presence in more major markets. It is also unclear whether Asiana's secondary short haul international routes, with which it has struggled over a few years, can even be profitable on an LCC platform. It may be early days for Air Seoul, but it is flying A321s in a very low density 171-seat configuration.

Meanwhile, a seventh LCC - Nambu Air - has been proposed by South Gyeongsang Province, which lost a bid to construct a new airport for southeastern Korea, including the second largest city Busan.